Entries for Factory Costs and Jobs Completed Law Publishing Inc. began printing
ID: 2450917 • Letter: E
Question
Entries for Factory Costs and Jobs Completed Law Publishing Inc. began printing operations on January 1. Jobs 401 and 402 were completed during the month, and all costs applicable to them were recorded on the related cost sheets. Jobs 403 and 404 are still in process at the end of the month, and all applicable costs except factory overhead have been recorded on the related cost sheets. In addition to the materials and labor charged directly to the jobs, $2,000 of indirect materials and $9,000 of indirect labor were used during the month. The cost sheets for the four jobs entering production during the month are as follows, in summary form:
Journalize the summary entry to record each of the following operations for January (one entry for each operation):
A) Direct and indirect materials used. For a compound transaction, if an amount box does not require an entry, leave it blank.
B)Direct and indirect labor used. For a compound transaction, if an amount box does not require an entry, leave it blank.
C) Factory overhead applied to all four jobs (a single overhead rate is used based on direct labor cost).
D) Completion of Jobs 401 and 402.
Explanation / Answer
Work in process (8240+3800+11600+2350)
**overhead rate = overhead forjob401 /direct labor cost
= 2240/3200.
= .70 or 70%
since single overhead rate is used ,overhead applied at a rate of 70%
Total direct labor cost = $10200
overhead applied = 10200 *.70 = 7140
Date Title Debit credit AWork in process (8240+3800+11600+2350)
25990 manufacturing overhead 2000 Raw material inventory 27990 [being Work in process debited with direct material and manufacturing overhead debited with indirect material recorded] B work in process (3200+3000+3500+500) 10200 Manufacturing overhead 9000 Wages payable 19200 [being Work in process debited with direct labor and manufacturing overhead debited with indirect labor recorded] C Work in process 7140 Manufacturing overhead 7140 [being manufacturing overhead charged /applied recorded] D Finished Inventory 22580 work in process -Job 401 13680 work in process- job 402 8900 [Being units completed transfered]]Related Questions
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